Innovations in Packaging Designs Create Brand Power

In 2015, MeadWestvaco Corporation (NYSE: MWV), a global leader in Packaging and Packaging Solutions, launched Packaging Matters™, the company’s third annual study about the impact of Packaging on Product Satisfaction and Consumer Purchasing Behavior. Packaging Matters’ data shows a strong correlation between Packaging and Consumer Attitudes to Brand.

Consumers who are completely satisfied with Packaging engage in sought-after purchase behaviors more often. These consumers are more likely than their less satisfied peers to purchase and use products frequently (57% v. 47%), shop frequently both in-store and online (24% v. 17%), and try something new because of Packaging (44% v. 36%).

Moreover, Packaging Matters data shows that 31% of global consumers consider Packaging very or extremely important to their overall satisfaction with consumer products.

In the 21st century and society is more image conscious than ever before. No area of life has been left untouched by these appearance appraisals, the packaging industry in particular.

Packaging is more than just a box. It’s the entire presentation of a Brand, encompassing all printed media from signage and brochures, to business cards and carrier bags. It should take your brand identity to a new level, whilst remaining true to company’s mission and vision. Whether your company sells a product or a service, its presentation is of vital importance.

There is no shortage of examples describing how design can resurrect once-troubled firms such as Apple and elevate others such as LG and Samsung to premium status. And juggernauts like P&G have used product and package innovation to reinforce their leadership role in categories from razors to detergent.

The Packaging of Apple products perfectly encapsulates the brand’s philosophy. Immaculately designed to perfectly exhibit the device, where every millimeter of space has been considered so each perfectly presented piece slots into its nook like a jigsaw piece. There is no fuss, just minimal simplicity and space, void of garish slogans or gimmicky tech specs. All attention is focused on the product itself, elevating its importance and adding to its worth.

Another example is the comprehensive re-brand and re-positioning of KFC in 2015, Grand Army was asked to re-imagine the brand’s identity and visual language. The most impressive part is that their original design has been carried throughout a dozen different boxes and buckets and cups. Overall, a great and cohesive effort on all fronts from packaging to advertising to digital presence that makes the brand move on, this is a great example of how a visual change can help business look somehow more genuine and homemade than its fast food competitors.

An effective Package Design ultimately needs to drive profit dollars to a brand. At its core, a successful Package should better connect with consumers and retailers; it should make the Brand more relevant. This, in turn, increases perceived value of total product, increasing consumer loyalty and the brand owner’s pricing power.The graphic below depicts one way of visualizing these elements. On the left, we see a profit pool created today. On the right, we see a larger profit pool created by movement of these levers.

Benefits of Packaging Re-designs

1. Price

Everyday selling price could increase because new design imparts a more premium image. Brand promotion depth or frequency could be reduced, improving average selling price. And the retailer margin might decline as brand strength increases, unlocking higher pricing to brand owner.

2. Variable Cost

Package component costs could decline if the redesign removes material or shifts spending to components with higher volumes or more competitive suppliers. Cost of the product being packaged could decline if package downsizing is incorporated into the strategy. And freight costs could decline if the pack-out efficiency improves or the redesign allows for manufacturing or filling at a location closer to distribution point or the end customer.

3. Quantity

Forecasting demand is difficult but essential. It begins with using current conditions as a base case (e.g., market share, penetration of consumer segments) and considering variables such as trial rates for new users and repeat rates (and impact on longer-term loyalty) for existing customers. An effective package redesign should improve awareness, trial, and repeat sales for a brand, driving greater overall demand.

4. Fixed Cost

Most package changes come with fixed or one-time costs. These can include cost of building a mold, cost of plates for new labels, or cost of transitioning or scrapping the old Packaging stock. Not all of these costs need be borne by brand owners, who often work with their supply bases to offset one-time costs.

Vietnam Packaging market

Companies in Vietnam still have less investment in Packaging and Labeling than their foreign rivals. The result of which is a misconception of product quality. While many Vietnam products outshine products made in China and other neighboring countries, consumers still prefer products from other countries in the region due to the perception that they are of a much higher quality. This is in no small part due to their Packaging and the Brand it portrays.

Research shows that 29.36% of large businesses who trade with countries in the TPP, stated that inferior packaging was one of the biggest hindrances when competing with other countries in the region.

It is very necessary for companies to realize that Packaging is an extension of product, so in thinking about the Marketing Mix, marketers need to make sure that their brand comes through strong in all aspects of their product.

Vietnam: Catching up with the Demand for Eco-Friendly Packaging

No industry is more central to environmental concerns than packaging. Companies in this industry have had to react to many Government policies and initiatives, and consumer concerns alike.

Retail operations are receiving pressure from environmental activist groups and environmentally-conscious consumers to sell more environmentally friendly products, the effects of which have rippled up through supply chains to distributors and manufacturers.

Industry leaders especially have recognized the need to address these concerns and are taking their responsibility as seriously by continuing to invest in developments that minimize environmental impact.

Such Packaging companies have focused their attention on innovating across three key areas – design, materials and production – which all lead to significant reductions in environmental footprints.

This may seem easy on the face of it, but eco-friendliness and packaging don’t necessarily go hand-in-hand. nonetheless, some companies have really pushed to create sustainable Packaging Solutions, finding a perfect balance between Design and Ethics. These options are wonderfully appropriate and on-brand for some companies. biodegradable coffee cups printed with natural inks reflect the ideals of a fair-trade café. Recycled cardboard supports are a highly functional solution for energy efficient light bulbs.

Though eco‐friendliness, in its image and aesthetics, appropriate for these type of companies, sustainable Packaging options are not just confined here. Most packaging companies now offer eco-friendly options so it’s easy for everyone to take responsibility for their carbon footprint.

However, while this trend is proliferating in developed countries, the high cost and technical resources required make eco-friendliness harder to achieve in developing nations. Already in 2012, Vietnam Government introduced a plastic tax but even then they allowed packaging to be exempt from the tax so as not to damage the industry.

Most Vietnamese consumers favor eco-friendly products and believe companies should take measures to improve the environment, a new Nielsen survey has found.

According to the survey, 91 percent of Vietnamese feel it is important for companies to implement programs to improve the environment, four points higher than the Asia Pacific average and far above global average of 83 percent.

More than half Vietnamese are also willing to support their environment by consuming more eco-products even at a relatively higher price, Nielsen said.

But while public sentiment may sway in favor of environmental products, the reality is different. Several years ago big supermarkets such as Metro, Big C and Coop-Mart switched to using environmentally friendly Packaging, but less consumers used them because they had to now pay for them, Tin Tuc (News) newspaper reported. Plastic bags are still widely used in small shops and markets.

Some firms said it is difficult to sell their products in retail market, because of the high prices. Also, consumers are not often willing to change their habits and use more environmentally friendly products.

Slowly though, with an influx of foreign investment into the industry, Vietnam is beginning to catch up with the rest of the world. After the signing of the TPP and EU FTA, Vietnam’s trade is with Europe and the US is set to sore, with this increase in trade comes a series of new regulations that will need to be met in order to make Vietnam products suitable for their respective markets.

Technical advances are being increasingly applied, which makes the process as well as the materials used less damaging to the environment.

Furthermore, an ever increasing middle class means that consumers can now afford to match their consumer choices to their environmental ideals.